Commerzbank Shareholders Bank €1.10 Dividend as UniCredit’s Hostile Tender Fails to Spark Interest

Commerzbank announces €1.10 dividend and share buyback, returning €2.7B to shareholders, while rejecting UniCredit's hostile takeover bid as stock hits near 52-week high.

Commerzbank is showering shareholders with cash this week, and the gesture could not be more pointed. On May 26, the bank will pay out a dividend of €1.10 per share — a 69% jump from the €0.65 handed out the year before — while the board simultaneously secured authority to buy back up to 10% of the outstanding share capital. In total, the lender is returning roughly €2.7 billion to owners for the 2025 financial year, absorbing 100% of net profit before restructuring charges and after AT1 coupon payments. For the coming years, management plans to distribute at least half of earnings as dividends.

The payout comes as the stock trades at €36.16, just 4% shy of its 52-week high of €37.75 and up 36% over the past twelve months. Strong first-quarter numbers underpin the confidence: operating profit came in at around €1.4 billion, up 11% year-on-year, and net income reached €913 million. For the full year, the bank now targets a net profit of at least €3.4 billion, raised from an earlier forecast, with a longer-term ambition of €5.9 billion by the end of the decade.

Yet the warm glow from Frankfurt stands in stark contrast to the cold shoulder Milan is receiving. UniCredit’s hostile takeover bid, launched on May 5, has so far attracted only 0.02% of Commerzbank shares — a paltry take-up that underscores how little interest the Italian lender has managed to generate. The offer’s value, calculated at around €34.56 per share, has consistently lagged the market price, which on the last day before the bank’s reasoned statement stood at €36.48.

Management and the supervisory board have been unambiguous in their rejection, branding the bid “vague” and laden with serious execution risks. They point to the “Momentum 2030” strategy as a superior path to value creation. Shareholders appear to agree, overwhelmingly approving the strategy and the record payout at the May 20 annual general meeting.

Barclays, which upgraded the stock to “Overweight” on May 21 with a €42.00 target, sees further upside of about 16% from current levels. The median analyst target across independent forecasts sits near €41.50, well above UniCredit’s offer. That disconnect leaves little incentive for existing holders to tender.

Technically, the rally has pushed the relative strength index to 80.6, signalling an overbought condition. The stock’s ability to sustain its momentum will hinge on whether the bank delivers on its upgraded earnings targets. Commerzbank is betting heavily on technology to get there, planning to invest €600 million in artificial intelligence between 2026 and 2030 to streamline processes and cut costs. Those efficiency gains come with a human cost, however: an additional 3,000 full-time positions are to be eliminated on top of the 3,900 already slated for reduction.

Political support remains firmly on Commerzbank’s side. Chancellor Friedrich Merz has described UniCredit’s approach as “hostile and aggressive” and rejected it unequivocally. The German government still holds around 12% of the bank, giving it a direct voice in any eventual outcome.

UniCredit itself has acknowledged the deal is a long-term project, not expecting completion until 2027 given the array of regulatory approvals required. Weekly acceptance updates — daily in the final stretch — will keep pressure on the Italian bank. If the take-up remains this thin, the case for improving the terms will grow louder, even if current insider reports suggest no sweetener is in the works. For now, Commerzbank’s board can point to the dividend cheque landing in shareholders’ accounts as the clearest signal that independence is working.