Commerzbank boss speaks of risks inherent in UniCredit takeover

Admin l Monday, October 07, 2024

BERLIN – The new chief executive of Germany’s Commerzbank on Monday warned that a potential takeover by the Italian lender UniCredit could bring significant risks.

Bettina Orlopp told the Handelsblatt newspaper that integrating the two banks would be extremely difficult, pointing to previous difficulties in merging systems after Commerzbank’s acquisition of Dresdner Bank in 2008.

“We cannot afford such a standstill in today’s world, which is characterized by so many technological upheavals and very intense competition,” Orlopp said.

Milan-based UniCredit recently moved to increase its stake in Germany’s second-largest bank to 21%, while applying for permission to increase its share to 29.9%.

The move has sparked concerns within Commerzbank, which is seeking to fend off the takeover bid.

Orlopp said German medium-sized businesses and corporations would receive fewer loans if UniCredit’s takeover is successful.

Overlaps among corporate clients between Commerzbank and Unicredit’s HVB subsidiary could result in a fall in lending to some companies due to the risk of clusters, she argued.

The chief executive warned that the German lender’s rating could deteriorate following a merger, causing it to lose customers.
While Commerzbank holds an A-rating with the S&P credit rating agency, UniCredit’s is three tiers lower at BBB.