Finance
UniCredit raises outlook with help from Commerzbank stake as it drops BPM bid
Published by Global Banking and Finance Review
Posted on July 23, 2025
3 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on July 23, 2025
3 min readLast updated: January 22, 2026
UniCredit raises its profit outlook for 2025 after abandoning its BPM acquisition bid, focusing instead on its stakes in Commerzbank and Alpha Bank.
By Valentina Za
MILAN (Reuters) -UniCredit on Wednesday reported higher than expected quarterly income and raised its outlook for 2025 and beyond, a day after a clash with the government prompted Italy's second biggest bank to ditch its takeover bid for rival Banco BPM.
UniCredit late on Tuesday said it was withdrawing the offer, blaming government intervention in the process, which it said deprived Banco BPM shareholders, as well as Italy's economy, of a good opportunity.
"We've drawn a line on this transaction," CEO Andrea Orcel told CNBC television. "At some point you need to cut your losses, eliminate your drag and focus on what you control."
After sinking a deal with Italy's government to buy Monte dei Paschi (MPS) in 2021, Orcel derailed Rome's plans to combine MPS with Banco BPM, with the administration eventually imposing conditions on UniCredit's proposed takeover.
Despite scoring a partial court victory this month, and with European Union support expected, UniCredit ditched the BPM bid, a decision which JPM analysts said was "disappointing strategically".
A source with direct knowledge of the matter told Reuters that Banco BPM's main investor Credit Agricole also posed an obstacle, having upped its stake close to 20% with Italy's blessing in December and now seeking regulatory clearance to go up to 29.9%.
UniCredit's tussle with Rome and opposition in Germany over its Commerzbank investment highlight a wider European trend of government involvement in banking consolidation.
Spain's BBVA has encountered similar government resistance to its bid for Sabadell.
NO OPPORTUNITIES
Orcel, a veteran dealmaker, told analysts he saw no good M&A opportunities at present and UniCredit would settle for consolidating its stakes in Commerzbank and Greece's Alpha Bank in its accounts.
That is expected to lift UniCredit's 2027 income above 11 billion euros ($13 billion), up from a previous 10 billion forecast.
Orcel said UniCredit respected Germany's refusal to table discussions over its 29% stake in Commerzbank, and ruled out any further move on Alpha, in which it owns nearly 20%, without the Greek bank's consent.
JPMorgan analysts also noted Commerzbank's high share price hindered a takeover because UniCredit would not be able to offer a premium.
UniCredit raised its 2025 net profit goal to around 10.5 billion euros, from previous guidance of more than 9.3 billion euros, helped by a smaller than anticipated decline in income from the gap in deposit and lending rates and further cost cuts.
Overall revenue is still set to decline this year to 23.5 billion euros from 24.8 billion in 2024.
Net profit in the three months through June totalled 2.9 billion euros excluding one-off items, and 3.3 billion when including those. That is above a 2.5 billion euro forecast for the unadjusted figure in a company-gathered analyst consensus, and up from 2.7 billion euros a year ago.
UniCredit said it would pay shareholders at least 30 billion euros in 2025-2027, at least half of which in cash dividends and the rest through share buybacks, depending on potential acquisitions.
The bank took a 335 million euro hit in the quarter as it unwound hedging of its Commerzbank stake. Other one-off items included a positive accounting impact from the equity consolidation of its initial 9.9% Commerzbank holding and the revaluation of stakes in life insurance ventures in which UniCredit has bought out its partners.
($1 = 0.8527 euros)
(Reporting by Valentina Za, editing by Alvise Armellini and Tomasz Janowski, Kirsten Donovan)
UniCredit reported higher than expected quarterly income, with net profit in the three months through June totaling 2.9 billion euros excluding one-off items, exceeding the 2.5 billion euro forecast.
UniCredit withdrew its offer for Banco BPM due to government intervention, which it claimed deprived shareholders of a good opportunity.
UniCredit raised its net profit goal for 2025 to around 10.5 billion euros, up from previous guidance of more than 9.3 billion euros.
UniCredit plans to pay shareholders at least 30 billion euros from 2025 to 2027, with at least half in cash dividends and the rest through share buybacks.
UniCredit faces challenges due to Commerzbank's high share price, which hinders a takeover as UniCredit would not be able to offer a premium.
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