“The move on Commerzbank is a test case for Europe“He said it loud and clear. Andrew Orcel, speaking at the Bank of America conference in London in his first public appearance since the political chaos that erupted in Germany and beyond following UniCredit's purchase of a potential 21 percent stake in Germany's second-largest bank.
The CEO of Piazza Gae Aulenti underlined: “We will not ask for seats on the Commerzbank board of directors”, and clarified that the Italian institution will pursue an agreement with Commerzbank only in the event of broad support from shareholders and if the conditions are right, otherwise it could decide to liquidate the investment. Words that the market liked with the Unicredit title which rose to the top of the Ftse Mib (+0,05%), marking a rise of 1,56% to 37,84 euros.
Orcel: “On Commerzbank all scenarios are open, there are 3 alternatives”
The one in Commerzbank “at the moment it's an investment, nothing else. There are no offers, we are a large shareholder” and now also “a strategic shareholder,” but “we made an investment due to the way Commerzbank fits our parameters,” Orcel explained, speaking at the 29th Financials CEO Conference of Bank of America.
The manager noted that at the price at which the bank made the investment he expected a return “well above 15%”, also remembering that the institute has put in place hedges to protect itself from any decline in value.
From here on out there are therefore "three alternatives", the CEO of Unicredit underlined: “let's stay like this and we help Commerzbank to crystallize the untapped value that we believe exists, let's find a way to do something bigger, but to do so both parties must want it", or if all this "doesn't work we sell and hopefully more will come back into our capital” than what went out “and we will distribute it to the shareholders”.
Orcel urged the audience not to “underestimate how disciplined we are: we don’t need to do something together” with Commerzbank, “we are not obligated to do it.” “If the question is whether we will be forced to do it on terms that are not convincing, the answer is no,” he concluded, reiterating that “all scenarios are open, there is no one that predominates.”
Orcel: “We will not ask for seats on the Commerzbank board of directors”
"We will not ask for board seats" of Commerzbank, the number one of Unicredit then specified, adding that “we are an investor” and “I don’t think investors should have seats on the board of directors and in this case it would also be inappropriate because we are also a competitor,” he added. “As long as we are investors, what matters is to act as such and have access only to public information,” Orcel continued, “and our role can be to suggest what to try to do also based on the experience already had with HVB.
Orcel: “We want to reopen a dialogue, it is a 3,5 billion investment”
During his speech the CEO launched a olive branch to the German government, who in recent days has not hidden his strong opposition to the operation. Even the German Chancellor intervened on the issue Olaf Scholz, speaking of “Unfriendly Attacks” and “Hostile Takeovers”, while on Wednesday government spokesman Steffen Hebestreit, answering the question whether the Scholz government intends to avoid the acquisition of Commerzbank by Unicredit, said: “It's not up to us, we are not actors, the government holds shares”. “There is no further reflection to avoid something and this now depends on the players in the capital market,” he added. A spokesperson for the EU Commission declined to comment directly on the deal on Tuesday, but said that bank mergers are useful because make them “more resilient to shocks thanks to greater diversification of assets” and also represent an advantage for the economy.
Responding to a journalist's question whether the bank had engaged with the German government in the process of purchasing a potential 21% stake in Commerzbank, Orcel said: “I would say, more generally, that we have spoken, repeatedly, with many stakeholders of Commerzbank and so when we were invited to buy 4,5%” of the German state “it seemed to us that it was the normal consequence of that process”.
“I think every bank that makes a move like this has the tendency to talk to all the relevant stakeholders and not just once, but more than once, to check whether at least in the initial assessment most of the stakeholders are in the right place,” the banker stressed. “Whatever path we have ahead requires continuing the dialogue and having a dialogue. We are more than willing to reopen that dialogue. and to have a constructive dialogue with all stakeholders", also because, he recalled, "we have 3,5 billion invested in Commerzbank".
Deutsche Pulls Out, Commerz Changes CEO
Important news also comes from Germany: Deutsche Bank officially pulls out of Commerzbank deal“I think we still have some work to do before we are really ready to participate in the consolidation,” said the chief financial officer of Germany's largest bank, James von Moltke, who has in fact excluding the possibility of an interest for Commerzbank, eliminating a potential competitor of Unicredit in the race for the German bank. On September 16, the agency Bloomberg had revealed that CEO Christian Sewing and his managers were studying different options, including the possible purchase of part or all of the remaining 12% stake in Commerzbank still held by the German government, in order to put a spoke in UniCredit's wheels and prevent the emergence of a huge competitor in the national banking market.
“We have our strategy to execute, we have made promises to our investors,” added von Moltke. we don't think we're ready, that we are in the position. Management believes that there is a great upside potential” in Deutsche Bank “that we need to demonstrate to our investors, before we want to share it with another group of shareholders”.
Meanwhile, on Tuesday evening, CommerzBank has announced a change at the top, with CFO Bettina Orlopp to become CEO of the banking institution. The Supervisory Board of Commerzbank also appointed her as the new Chairman of the Management Board, with the resignation of the current Chairman Manfred Knof. The assumption of the office, according to a statement, will take place “in the near future”. In addition, the Supervisory Board decided to appoint Michael Kotzbauer as Vice Chairman with immediate effect.
Unicredit revises targets: profit above 9 billion
“I am sure that you are all interested in the investment we are making in Commerzbank, but first I want to emphasize that the team's focus is on Unicredit, the main show is Unicredit,” Orcel said at the Bofa conference, announcing that in 2024, Unicredit's net profit will be 'over 9 billion', thus raising the bar compared to the forecasts that indicated the net result above 8,5 billion. The bank's CEO expressed confidence that, excluding investments, the bank will report a profit of 10 billion: "this is the clean number", obviously excluding the dta", he said. However, he explained, "we said that we will make investments and we are closer to the end of the year, so we have more visibility on what these investments can be - he continued - We think that the year will report a net profit of over 9 billion". "This number compares with the 8,6 billion in 2023".
At the same time, the bank announced that it had Bancassurance agreements revised: will acquire the shares of Cnp Assurances and Allianz in Vita which will eventually be merged and placed under the leadership of Alessandro Santoliquido.
(Last update: 16.45 pm on 25 September).
