Commerzbank's €1.2bn Dividend Bolsters Board's Rejection of UniCredit's Bid

Commerzbank pays record €1.10/share dividend, targeting 100% payout through 2028, as CEO Orlopp uses strong earnings to counter UniCredit's takeover bid.

Commerzbank distributed a record €1.10 per share in dividends on Wednesday, funnelling €1.2bn directly to shareholders and sharpening the board’s case for remaining independent. The payout forms part of a total capital return of €2.7bn for the 2025 financial year, which also includes €1.5bn in share buybacks. At 100% of adjusted net income, the distribution ratio leaves no doubt about management’s determination to reward investors.

Chief executive Bettina Orlopp is wielding the generous payout to counter UniCredit’s share-exchange offer. The Italian lender now holds 38.87% of Commerzbank and is proposing 0.485 of its own shares for each Commerzbank share, with an acceptance deadline of 16 June 2026. The board has formally advised rejection, arguing that the bid undervalues the bank’s stand-alone prospects.

The “Momentum 2030” strategic plan provides the financial backbone of that argument. Management targets a return on equity of 21% and a cost-to-income ratio of 43% by the turn of the decade, and has pencilled in a 100% payout ratio for both 2027 and 2028. Operating profit climbed 11% year-on-year in the most recent period, while earnings per share for the first quarter of 2026 came in at €0.84, up from €0.73 a year earlier, even as revenue edged slightly lower.

Analysts have taken note of the momentum. The median price target sits at €41.50, with Barclays reaffirming an “Overweight” rating and a €42 target. The stock slipped 1.28% on Thursday to €36.33 as the dividend went ex-div, though it still trades roughly 7% above its 50-day moving average. Its relative strength index of 71 points to recently strong buying pressure, and on a year-to-date basis the shares have gained around 37% — well above the implied value of the UniCredit offer.

Complicating matters further, the regulatory landscape remains unsettled. The European Commission recently called for changes to Italy’s “Golden Power” legislation, which could influence the feasibility of cross-border bank mergers. Until the 16 June deadline closes, every operational update from Commerzbank will be scrutinised for its ability to tip the scales in this high-stakes stand-off.