UniCredit expects Commerzbank stake authorizations by end-November, with new governance and Unlocked launch possible as early as Q1.
Orcel is optimistic about an agreement with the German government on Commerzbank, saying job cuts are far lower than rumored.
After abandoning Banco BPM, Orcel says UniCredit will grow organically in Italy, gaining 10 bps of market share monthly, and sees no large M&A after Commerzbank.
UniCredit Bets Commerzbank Control Will Build Germany's Best Bank
UniCredit is converting a large minority stake in Commerzbank into operating control. Authorisations should all arrive by the end of November, letting it install new governance and start Commerzbank Unlocked, the first phase of a blueprint it has run at 13 banks. Orcel is optimistic about terms with the German government and content to sit at roughly 50%, with a Commerzbank-HVB combination possible if the rationale is strong.
Takeaways
Commerzbank is UniCredit's central project. Orcel wants Commerzbank to become the best bank in Germany alongside HVB, and says the rest is governance. The core is a broad base at Commerzbank that is committed and convinced, as at every other UniCredit bank .
Best quarter ever, a sector-leading beat. Revenues rose 12% with core revenues at 90% of the total, gross operating profit hit a record up 20%, the cost-income ratio improved below 33%, net profit rose 24% and return on tangible equity is around 25% .
Growth came from share, not margin. UniCredit gained market share at flat margin and flat risk across all markets, led by Italy, while transforming its operating machine with AI and model changes that Orcel credits for the efficiency behind the beat .
Orcel optimistic on a German government deal. Talks with Berlin continue and both sides call them constructive. They cover location, listing, a Mittelstand commitment and other soft issues. Orcel says job-cut numbers are far lower than rumoured, and he is optimistic about a deal everyone can celebrate .
Comfortable at 50%, open to HVB merger. UniCredit owns about 50% of Commerzbank and Orcel calls that the best place to be. He would consider combining it with HVB if shareholders and employees at both institutions see a strong rationale, while Berlin decides its own roughly 13% stake .
Italy consolidation answered with organic gains. After abandoning Banco BPM, a deal Orcel still calls good at the time, UniCredit is gaining about 10 basis points of Italian market share a month, 130 basis points from August to August, with six of the top seven Italian banks tied up in M&A .
No big M&A after Commerzbank. Orcel does not expect another large deal after Commerzbank, because what UniCredit can deliver organically is far more than he can do through M&A. Share gains should accelerate over the next four to eight quarters .
The Commerzbank timetable
All authorisations for the stake should land by the end of November, sooner than UniCredit first thought .
The shift of control and new governance could follow as early as the first quarter .
That lets UniCredit kick off Commerzbank Unlocked, which Orcel calls phase one of a blueprint run at 13 banks and at HVB .
Cooperation would superimpose better Commerzbank performance on UniCredit's momentum, with more people backing the plan .
