UniCredit raises Commerzbank stake to 28% with further derivatives

MILAN (Reuters) - Italian bank UniCredit said on Wednesday it had raised its potential stake in Germany's Commerzbank to 28% by signing new derivative contracts.

UniCredit has applied to the European Central Bank to be allowed to get to 29.9% of Commerzbank. It said it was in touch with supervisors while the authorisation process was ongoing.

It said it held 9.5% of Commerzbank as a direct stake and 18.5% through derivatives.

"UniCredit's average entry price for the entire position is below current trading levels," the bank said, indicating it would be able to liquidate the investment at a profit.

"UniCredit's economic exposure is almost fully hedged, displaying prudence in approach and providing full flexibility and optionality."

The move comes while UniCredit has also launched a buyout offer for smaller domestic rival Banco BPM.

(Reporting by Valentina Za; Editing by Tomasz Janowski and Louise Heavens)