Commerzbank CEO criticises UniCredit stake as Italian lender pushes tie-up

By Tom Sims and Alexander Hübner

FRANKFURT (Reuters) -The CEO of Commerzbank, who is fending off a potential takeover by UniCredit, criticised the Italian lender's holding on Wednesday as "not ideal" due to the direct competition in Germany between the two banks.

UniCredit has amassed a 20.2% equity stake in the German lender as it pushes for a tie-up, despite resistance from Commerzbank management, employees and the German government.

CEO Bettina Orlopp's comments mark a ramping up of rhetoric by the German bank's management as it seeks to prove that Commerzbank is better off remaining independent. The bank posted better-than-expected earnings and raised its full-year profit outlook on Wednesday.

"The shareholding situation with UniCredit is, to put it mildly, not ideal, as UniCredit is a direct competitor in the German market. We are convinced that the ongoing successful execution of our standalone strategy is the right focus," Orlopp told analysts.

"Our expectation is clearly that they act as an investor and nothing else," she added.

She has previously criticised UniCredit for talking down Commerzbank's share price.

UniCredit CEO Andrea Orcel has said a deal "would create a new national banking champion for Germany" and aid "the revitalisation of the German economy".

'BEST RESULTS IN HISTORY'

Commerzbank executives have been working to win shareholder support for their standalone strategy by delivering robust earnings and initiating share buybacks. 

The bank's second-quarter net profit came in at 462 million euros ($535.09 million), 14% less than a profit of 538 million euros last year due to restructuring costs. Analysts, on average, had projected a profit of 369 million euros, according to a consensus forecast published by Commerzbank.

The bank said it has applied to regulators for approval to buy back up to 1 billion euros worth of shares. It is planning another share buyback later this year.

"In the first half of the year, we achieved the best operating result in the history of Commerzbank and are progressing fast with our transformation," Orlopp said.

The bank said it was increasing its net profit outlook for 2025 to around 2.5 billion euros after restructuring expenses, up from an earlier forecast of 2.4 billion euros. It also raised its forecast for net interest income. 

The bank announced earlier this year that it would axe 3,900 mostly local jobs to help it deliver more ambitious profit targets as part of its effort to fight off UniCredit's advances.

The bank had flagged that it would book most of the resulting restructuring expenses in the second quarter. They totalled 534 million euros.

($1 = 0.8634 euros)

(Reporting by Tom Sims and Alexander Huebner; Editing by Miranda Murray, Sherry Jacob-Phillips and Joe Bavier)