Commerzbank's Balancing Act: Higher Rates Boost Earnings as Takeover Battle Turns Ugly

ECB rate hike lifts Commerzbank's net interest income outlook; bank raises profit forecast to €3.4B as works council files criminal complaint against UniCredit.

Frankfurt — The next few days could hardly be more consequential for Commerzbank. On one side, the European Central Bank has just handed the lender a fresh tailwind with a quarter-point rate hike, reinforcing an already raised profit forecast. On the other, the bank's works council is going on the offensive against UniCredit, filing a criminal complaint just days before the Italian lender's first offer deadline expires.

ECB Rate Move Lifts Net Interest Income Outlook

The ECB's decision on June 11 to increase all three key interest rates by 25 basis points came as the central bank battles to bring inflation back to 2% over the medium term, with the energy price shock from the Middle East conflict adding persistent pressure. The Bundesbank projects overall inflation at 3.0% for 2026 and 2.3% for 2027, before finally reaching the 2% target in 2028.

Commerzbank was already counting on rising interest income when it upgraded its full-year guidance in May. Management now expects net interest income of around €8.6 billion for 2026, up from a previous €8.5 billion. The higher-for-longer rate environment bolsters that trajectory, though the bank acknowledges that stronger borrowing costs could eventually weigh on loan demand.

First-Quarter Results Support the Optimism

The lender's first-quarter numbers show it is capitalising on the favourable rate backdrop. Net interest income came in at €2,047 million, only marginally below the year-ago figure of €2,071 million despite a period of falling rates earlier in 2026. Within the private and small-business customer division, interest income jumped 9% to €658 million, while the corporate client segment added 7% to €638 million. Lending volumes in the corporate unit surged 16% to €120 billion.

Operating profit rose 11% year-on-year to €1,358 million, and net profit improved to €913 million. Buoyed by this performance, Commerzbank has lifted its full-year net profit target to at least €3.4 billion, compared with an earlier goal of more than €3.2 billion.

Works Council Escalates Fight Over UniCredit's Offer

Just as Commerzbank's financials are strengthening, the battle over its future ownership is turning acrimonious. The group works council has announced plans to file a criminal complaint against UniCredit for suspected market manipulation and misleading conduct under Sections 119 and 120 of the German Securities Trading Act.

The complaint, filed against persons unknown but clearly aimed at UniCredit, centres on an anomaly in the acceptance pattern for the Italian bank's exchange offer. Commerzbank says it could not identify a single institutional investor that tendered shares. Instead, the shares that have been delivered came almost exclusively from banks and parties with close ties to UniCredit — entities that held no material stake before the offer was announced.

Stock Lending Spike Raises Questions

Adding to the tensions, securities lending activity in Commerzbank shares has jumped more than tenfold since the offer was made public. The bank's management suspects a link between this surge and the tendering behaviour of UniCredit-related parties, and is demanding full disclosure of all hedging and derivative agreements.

UniCredit has dismissed the allegations, insisting that its disclosures are fully compliant with regulations and that it has maintained an open dialogue with BaFin, the German financial regulator.

Math Favours Sitting Tight

For shareholders, the arithmetic is straightforward. UniCredit is offering 0.485 of its own shares for each Commerzbank share — a value roughly 6% below the current market price. Accepting means taking a haircut, which helps explain the scant 10.95% acceptance rate so far. The Commerzbank stock currently trades at €36.89, up 1.79% on the day, and has gained about 32% year to date. That puts it within striking distance of its 52-week high of €38.15 hit on June 1.

The first acceptance period ends on June 16, with a second window running from June 20 to July 3. The criminal complaint gives the works council additional leverage, but the ultimate outcome will depend on whether BaFin picks up the transparency demands. For now, Commerzbank's improved earnings outlook and the ECB's rate support give it a stronger hand — but the political and legal drama around UniCredit's bid is far from over.