The German banking sector is witnessing a high-stakes corporate battle as Commerzbank faces the looming threat of a hostile takeover by Italian banking giant Unicredit. As part of its defensive strategy, Commerzbank is reportedly considering significant job cuts, potentially affecting thousands of employees.
Defensive Measures and Job Reductions
According to media reports, Commerzbank may lay off up to 4,000 employees as it seeks to strengthen its position against Unicreditâs advances. The bank has not officially confirmed these reports, with a company spokeswoman pointing to the upcoming capital market day for further insights. Commerzbank is expected to unveil a revised strategy alongside its 2024 financial results during the event.
Strategic Moves to Thwart Takeover
Bettina Orlopp, who took over as CEO in the fall of 2024, is leading efforts to prevent the takeover. To make Commerzbank more attractive to its shareholders and deter them from selling their stakes to Unicredit, the bank is aiming to boost profits beyond three billion euros by 2027. Additionally, improved financial performance and increased shareholder returns are key pillars of this strategy.
Unicreditâs Growing Influence
Unicredit unexpectedly acquired a 9% stake in Commerzbank last year and has since expanded its influence through financial instruments, now holding approximately 28% of the bankâs shares. However, the Italian lender still requires regulatory approval to increase its direct shareholding further.
Financial Performance and Future Prospects
In a surprising move, Commerzbank recently released preliminary financial figures ahead of schedule, reporting a profit of nearly 2.7 billion eurosâapproximately 20% higher than the previous year. The bank also announced an increase in dividends from 35 to 65 cents per share, a move likely aimed at reinforcing investor confidence.
Unicreditâs Strategy and Political Considerations
Unicredit CEO Andrea Orcel has indicated that the takeover process could extend over the next two years. He has expressed his intent to delay any formal offer until the fourth quarter of 2025 or early 2026, waiting for the outcome of the German federal elections. His plan involves negotiating with the new government before making further moves in the acquisition process.
Conclusion
The ongoing battle for control of Commerzbank underscores the volatility in the European banking sector. While the German lender fights to maintain its independence, Unicreditâs growing stake signals an intensified struggle ahead. The coming months will be crucial in determining whether Commerzbank can successfully defend itself or if it will ultimately succumb to the Italian banking giantâs takeover ambitions.
