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Commerzbank will “exchange views” with UniCredit in a first meeting on Friday, incoming chief executive Bettina Orlopp told investors, as the German lender attempted to woo them with promises to lift profits and payouts to shareholders more than previously expected.
Orlopp, who was this week named as the bank’s next chief executive in the wake of aggressive stakebuilding by the Italian lender, told investors on Thursday that “UniCredit is now a shareholder and it is very normal that you exchange views”.
But Germany’s second-largest listed lender simultaneously unveiled more ambitious growth and profit targets, as it seeks to make the case for its independence.
The bank’s chair, Jens Weidmann, said in a statement: “Commerzbank is continuously expanding its independent position as a strong pillar in the German banking market.”
UniCredit has sent shockwaves through the German establishment by rapidly building a 21 per cent stake in Commerzbank — subject to approval from the European Central Bank for the latest purchases — with a chunk of its holding bought from the German government.
The Italian bank’s manoeuvres have left both Commerzbank and German politicians on the back foot. The German government still owns a 12 per cent stake in the lender, and a potential takeover by UniCredit is extremely politically sensitive.
Both Chancellor Olaf Scholz and finance minister Christian Lindner have in recent days criticised the stealthy way UniCredit emerged as Commerzbank’s largest shareholder and put the German bank in play.
Weidmann, a former Bundesbank president, described the lender as “Bank for Germany”. Top politicians and senior union officials have lashed out against selling the lender “to the Italians”.
UniCredit’s chief executive Andrea Orcel, who has been eyeing the German rival as a potential takeover candidate for years, said on Wednesday that full integration was one of several options as UniCredit could also remain a financial investor or sell down its stake again.
Commerzbank’s updates to its medium-term strategy on Thursday said the bank could accelerate revenue growth faster than envisaged a year ago, and that its risk-weighted assets would be lower than previously expected.
Revenues, which stand at about €12bn this year, are now expected to rise to €13.3bn, compared with previous guidance of €12.5bn. At the same time, the bank expects to have risk-weighted assets of €189bn in 2027, compared with the previous estimate of €196bn.
“The bank’s profitability is to be improved even more in the coming years, primarily by further increasing its earnings,” the lender said in a statement on Thursday.
By 2027, Commerzbank now expects to lift its return on tangible equity to more than 12 per cent, up from its previous target of 11 to 11.5 per cent and compared with a return of 8.9 per cent in the first half of this year.
It said it was planning to pay out “more than 90 per cent” of its earnings to shareholders for the years 2025 to 2027, compared with its previous target of more than 80 per cent.
Dividends and payouts are contingent on approval from its top regulator the ECB and the German government as a key shareholder.
The bank also forecast that net profit would rise to “over €3bn in 2027” compared with €2.2bn in 2023, although analysts on average already expect net profits to increase to €3.1bn in 2027.
Shares in Commerzbank jumped 5 per cent to more than €16, their highest level in more than 12 years.
