UniCredit open to concessions in Commerzbank talks as it raises profit outlook
UniCredit’s Strategic Moves and Financial Performance
By Valentina Za
Background of UniCredit’s Stake in Commerzbank
MILAN, July 23 (Reuters) - UniCredit wants talks with the German government and Commerzbank workers' representatives after securing 48% of the German lender, CEO Andrea Orcel said after the Italian bank posted strong results and raised profit guidance.
UniCredit first invested in Commerzbank in 2024, sparking a backlash in Germany. Berlin has rejected UniCredit's approach as hostile and backed Commerzbank's quest to remain independent.
Statements from Leadership
"I think the good news about the refusal of Commerzbank to engage is that we didn't make any concessions," Orcel told CNBC television.
Commerzbank CEO Bettina Orlopp has repeatedly said she had personally conveyed to UniCredit a willingness to open talks.
"We got to control potentially without making any concession, as you usually would in a transaction. So now we are quite open," Orcel said.
Financial Results and Outlook
Second-Quarter Earnings and Profit Guidance
UniCredit on Thursday posted better than expected second-quarter earnings, helped by strong fee income, and improved its profit outlook for 2026 and 2028.
It cancelled a planned €4.75 billion ($5.43 billion) share buyback that had been put on hold pending the outcome of the bid and said the investment in Commerzbank would return 15%, more than the buyback.
Share Buybacks and Returns
Since his arrival at UniCredit in 2021, Orcel has bet heavily on share buybacks to lift its share price. Returns on share buybacks decline as the stock price rises.
Net Profit and Future Expectations
Net profit for the April-June period rose to €2.9 billion, ahead of a €2.8 billion average analyst forecast gathered by the bank.
UniCredit now expects 2026 income comfortably above €11 billion, compared with previous guidance for a result in line or above that figure. It says it will rise to significantly more than €13 billion in 2028. That is before any integration costs and the full consolidation of Commerzbank, it said.
Capital Position and Authorisations
UniCredit's buyback cancellation will allow the Italian bank to keep its core capital at 13% of assets at the end of the year despite the hit from consolidating Commerzbank into its accounts, after the bid resulted in a bigger stake than anticipated.
Orcel said all relevant authorisations to that end could arrive in the fourth quarter, earlier than expected.
(Reporting by Valentina ZaEditing by David Goodman)