Banking News

Commerzbank in UniCredit's sight

Commerzbank in UniCredit’s sight

(21 September 2017 – Europe) Italy's UniCredit has recently demonstrated interest in an eventual merger with German state-backed Commerzbank, reports state.

A combined entity of the two would create one of Europe’s largest banks, as well as being one of the region’s largest cross-border mergers.

A deal could be finalised following the Italian bank’s two-year turnaround, sources said.

The German government owns a 15 percent stake in Commerzbank, which may prove a hurdle should it not want to give control to a foreign lender.

"UniCredit has been in touch with the German finance ministry," said one of the people, adding that while the government was open to a sale, Commerzbank had not shown any interest.

A German finance ministry spokesman told Reuters, "We have always said that the government does not want to keep its (Commerzbank) stake forever and wants to get a good result for the taxpayer.”

According to sources, executives at Commerzbank and its larger rival Deutsche Bank held unsuccessful talks on a combination last year. A merger would fulfil the European Central Bank's (ECB) ongoing aim for consolidation.

UniCredit's interest also shows that its chief executive, Jean Pierre Mustier, is looking beyond cleaning up the bank, which raised €13 billion through new share issues this year.

Last month, UniCredit posted its biggest quarterly profit in almost a decade.

UniCredit, with market value of almost €40 billion, is worth around three times as much as Commerzbank.

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