Boss of Italy's UniCredit aiming at takeover of Germany's Commerzbank

Andrea Orcel, chief executive of Italy's UniCredit, expressed an interest in a complete takeover of Germany's Commerzbank, in remarks published on Monday in Germany's Handelsblatt financial daily.

"A merger of the two banks could lead to considerable added value for all stakeholders and create a much stronger competitor on the German banking market," Orcel said after UniCredit increased its stake in Commerzbank to some 9%.

Commerzbank chief executive Manfred Knopf confirmed contact with the Italian bank, but said Commerzbank remains focused on implementing its own strategy.

If another plan was presented, it would be tested for advantages to stakeholders, customers and staff, Knopf said on the sidelines of a German banking association event in Berlin.

In his remarks to Handelsblatt, Orcel said that private customers could be better supported and Germany's mid-sized companies could be boosted with loans and offered more comprehensive service on international markets.

There were few overlaps between the two banks, Orcel said, adding the banks complemented each other geographically and were well balanced with private and business customers. There were also opportunities for cutting costs in central functions in particular, he said.

"It is important for Commerzbank to boost its balance sheet and at the same time to become more profitable," he said. "The current management has made clear progress here, but in my opinion much more can still be done."

Orcel noted that the return on capital of UniCredit's German subsidiary HypoVereinsbank (HVB) was twice that of Commerzbank and that its costs were well below those of Commerzbank.

The UniCredit head said he was not aiming to take a seat on Commerzbank's supervisory board but wanted rather to engage in "constructive dialogue" with the Commerzbank executive.

Knopf said Commerzbank was implementing its "Strategy 2027" in confidence that it would boost the bank's profitability and growth.

If a different plan was presented, it would be compared, he said. "But nothing has been presented," Knopf said.

The German state took a large stake in Commerzbank following the 2008 global financial crisis. UniCredit subsequently acquired a stake of 4.5% as part of the German government's phased withdrawal. It has since increased its stake through purchases in the market.

Knopf said he was unable to speak for the government. "Naturally we have our arguments, and they will always be presented by us on why a strong Commerzbank is of course good for Germany as a finance centre," he said.

A full takeover is set to face opposition from Germany's large verdi services trade union, which fears job losses.

A Finance Ministry spokeswoman said on Monday that the government was assessing the situation in the light of Unicredit's moves.