Commerzbank's Board Circles the Table With UniCredit as Record Earnings Bolster Its Hand

First formal talks signal thaw in UniCredit-Commerzbank standoff, with Commerzbank's record earnings and political hurdles shaping the deal's future.

The opening exchanges between UniCredit's Andrea Orcel and Commerzbank chief executive Bettina Orlopp have shifted a months-long standoff into a more constructive gear. First formal talks between the two executives have now taken place, with the conversation centred on what a future change of control at the Frankfurt lender would actually mean in practice — from accounting treatment and legal scaffolding to the mechanics of risk management.

The supervisory board, for its part, has made clear where it stands. Chairman Jens Weidmann offered an unequivocal endorsement of the management team, stating that the executive board has the full backing of the oversight body. That marks a notable evolution in tone from late July, when Weidmann merely acknowledged the shifting balance of power and signalled a willingness to engage constructively with the Italian bank.

A Takeover Fight Transforms Into a Technical Exercise

The diplomatic thaw follows a period of public friction over how UniCredit assembled its position. Weidmann used last week to deliver a pointed critique of the takeover's circumstances, noting that of the roughly 73 percent of shares eligible for tender, only about 18 percent were actually offered — and less than 3 percent of that came from institutional or private investors. The remainder, he argued, was supplied by banks affiliated with UniCredit itself. That has prompted his call for a review of Germany's takeover legislation, alongside a push for the federal government to retain its shareholder role in order to safeguard domestic interests.

The political dimension remains unresolved. Senior government figures have indicated a willingness to discuss selling Berlin's 12.7 percent stake to UniCredit, provided the two banks can agree on a joint strategy. But officials stress this is not an official government position, and neither talks nor a transaction are guaranteed.

Record Numbers Provide Negotiating Leverage

What strengthens Commerzbank's hand as negotiations proceed is the underlying performance of the standalone business. The bank posted a first-half operating result of 2.7 billion euros, up 14 percent year on year, while net profit hit a record 1.8 billion euros. Revenues climbed 7 percent to 6.5 billion euros, and the second quarter alone delivered net income of 898 million euros.

That momentum prompted management to lift its full-year net profit target to at least 3.4 billion euros when it reported in early August. The medium-term ambitions are bolder still: under the "Momentum 2030" strategy, the bank is aiming for 5.9 billion euros in net profit, a 21 percent return on tangible equity and a cost-income ratio of 43 percent by the end of the decade. Nearer-term targets include a return on tangible equity of 12 percent and a cost-income ratio of 53 percent for 2026, with a payout policy of 100 percent once the hard core capital ratio reaches 13.5 percent.

The capital position is already solid — the CET-1 ratio stands at 14.4 percent — and the bank has announced a further share buyback of up to 1.2 billion euros, which the European Central Bank has already approved. Planned investments in artificial intelligence of roughly 600 million euros cumulatively between 2026 and 2030 round out the strategic picture.

Personnel Moves Signal Readiness for the Next Phase

The bank is also preparing its governance structure for what lies ahead. In early August, Jennifer Sander, formerly chief compliance officer at Oddo BHF, was appointed to the equivalent role at Commerzbank and brought into the leadership structure as a divisional board member.

Market Watches and Waits

Investors have taken a measured view of the evolving situation. The shares closed Friday at 39.08 euros, up 1.6 percent on the day, and have since edged to around 39.51 euros. That leaves the stock roughly 1.5 percent below its 52-week high of 40.11 euros, a level touched only in mid-August. The recovery from October's low amounts to 37 percent, with a gain of about 9.4 percent since the start of the year.

Analyst opinion remains divided on where the stock goes from here. DZ Bank set a fair value of 46 euros in early August with a buy recommendation, while JPMorgan lifted its price target to 38 euros but kept a neutral stance — a reflection of the uncertainty that persists even as the two sides move toward the negotiating table.