UniCredit CEO Discusses Potential Commerzbank Deal

MILAN (Reuters) – UniCredit CEO Andrea Orcel stated that banks must enhance efficiency and profitability, expressing confidence that potential deals will be informed by solid facts.

In beating expectations with third-quarter earnings and an improved profit outlook, UniCredit noted that its German operations returned 21.5% on capital allocated, compared to 10.2% at Commerzbank (excluding its Polish division).

Orcel’s interest in the German bank faces opposition from the German government, which backs Commerzbank’s independent strategy. Commerzbank also announced financial targets and affirmed that its growth plans are effective.

In a CNBC interview, Orcel emphasized the need for banks to compete against unregulated non-banking entities and attract investors, stating that responsibility lies with all parties involved if UniCredit opts out of a merger.

Despite existing tensions, he remains optimistic, arguing that factual performance indicators are favorable for both Germany and Commerzbank.

UniCredit described its German operations as similar to Commerzbank's and suggested that a merger could replicate its historical successes. However, it acknowledged that significant decisions would be required if a merger were pursued, while assuring a record of responsible staff management.

Orcel confirmed that a deal with Commerzbank would only occur if it benefited shareholder returns, adding that UniCredit is prepared to sell its stake at a profit if necessary. He concluded with a note of confidence for future positive outcomes.