Commerzbank's Chairman Urges Berlin to Stay Put as UniCredit's Regulatory Path Clears

UniCredit nears control of Commerzbank as ECB leans to approve stake increase, but supervisory board chief warns against cost cuts and urges Berlin to hold shares.

The battle for control of Commerzbank is entering a decisive phase, with the lender's supervisory board chief publicly urging the German state to hold onto its remaining stake even as regulators in Frankfurt appear increasingly inclined to wave through UniCredit's advance.

Jens Weidmann, who chairs the Commerzbank board, warned over the weekend that the Italian bank's planned €1.3 billion in cost cuts within a single year would threaten the substance of the German lender. His intervention comes at a delicate moment: UniCredit already controls roughly 47.6 percent of the shares and nearly 50 percent of the voting rights, and formal talks between Commerzbank chief executive Bettina Orlopp and her UniCredit counterpart Andrea Orcel kicked off in August, covering governance, accounting, legal structures and risk management.

Weidmann also took aim at Germany's takeover rules, arguing that UniCredit secured control without paying other shareholders an adequate premium. His remarks signal that resistance within the supervisory board has not softened, even after Berlin offloaded its stake to UniCredit last weekend.

Frankfurt's Quiet Nod

The regulatory picture is meanwhile coming into focus. The European Central Bank, according to an internal document, is leaning toward approving UniCredit's application to hold more than 30 percent of Commerzbank — though the institution cautioned its supervisory board that any full merger would trigger a "challenging and lengthy integration process."

Germany's BaFin confirmed the completeness of UniCredit's application in early August and forwarded it to the ECB for final assessment. Approval would lift UniCredit's holding to just under 50 percent, absorbing roughly 18 percent of shares stemming from the tender offer concluded in July, when about 17.6 percent of Commerzbank shareholders accepted the exchange.

That puts the federal government's 12.7 percent stake firmly in the spotlight. Should Berlin sell to UniCredit, the Italian group would vault past 60 percent and secure stable majority control. The government has signaled openness but stopped short of a formal commitment, insisting on a joint strategy backed by Commerzbank's incumbent management.

Record Numbers Complicate the Narrative

Investors, for their part, appear to be pricing in a successful takeover without succumbing to euphoria. The shares traded at €39.81 recently, just 0.7 percent below the 52-week high of €40.11 and roughly 38 percent above the October low of €28.90. Since Berlin's sale to UniCredit last Sunday, the stock has added 1.9 percent.

The resilience rests on more than takeover speculation. Commerzbank delivered a record first half, with net profit jumping 40 percent to €1.81 billion. Second-quarter earnings nearly doubled to €898 million, up from €462 million a year earlier, while revenues climbed 7 percent to €6.52 billion and return on equity reached 12.6 percent. Management confirmed full-year guidance of at least €3.4 billion in profit and announced another share buyback.

The bank's "Momentum 2030" strategy targets a 21 percent return on equity by the end of the decade and a 100 percent payout ratio once the CET-1 ratio hits 13.5 percent.

Analysts have taken notice. DZ Bank's Philipp Häßler raised his price target from €42 to €46 in mid-August, maintaining a buy rating with a takeover already baked into his base case. RBC Capital Markets reaffirmed its "outperform" stance with a €43 target on the day of the results.

Ghosts From the Past

One lingering distraction emerged on August 20, when four former Commerzbank employees were indicted over Cum-Ex dividend-stripping schemes. The case is unlikely to touch day-to-day operations, but it casts a shadow over the bank's governance record precisely as it prepares for a new ownership structure.

For now, the market's calculus is straightforward: record operating performance and a buyback program on one side, an unresolved power struggle on the other. Weidmann's public push to keep the state invested suggests the political battle is far from over — even as the regulatory path to UniCredit's control steadily clears.