Frankfurt (Germany) (AFP) – German lender Commerzbank on Friday reported its best quarterly profit since 2011, ahead of a key shareholder meeting where it will seek to rally support to fend off advances from Italy’s UniCredit. UniCredit has since last year built up a hefty stake in its German peer, fuelling talk that it is seeking a full takeover, a prospect that is fiercely opposed in Berlin.
Commerzbank’s net profit in the January to March period rose 12 percent to 834 million euros ($936 million) — a surprise increase after analysts forecast a slight fall. “We achieved the highest quarterly profit since 2011, demonstrating that we can grow even in economically challenging times,” said chief executive Bettina Orlopp. Revenues at Germany’s second-biggest lender increased almost 12 percent to 3.1 billion euros, boosted by better than forecast interest and commission income.
Commerzbank’s bosses are set to use an annual general meeting next Thursday to rally support for their strategy to remain independent. Employee representatives and unions are calling on staff to stage protests at the gathering in the town of Wiesbaden, west of financial capital Frankfurt, the Handelsblatt financial daily reported this week.
The UniCredit-Commerzbank saga began in September when Italy’s second-biggest lender revealed it had built up a stake in its rival, triggering talk that chief executive Andrea Orcel wanted to push for an ambitious pan-European banking merger. UniCredit has since boosted its holding to around 28 percent, and in March the European Central Bank gave the green light for the bank to buy up to 29.9 percent of Commerzbank.
Commerzbank has responded by announcing plans to cut 3,900 jobs, mostly in Germany, and share buybacks, in a bid to make itself more attractive to shareholders. UniCredit’s advances have shocked the corporate and political establishment in Berlin, with new Chancellor Friedrich Merz previously describing a possible bid for Commerzbank as “hostile.” However, Orcel has played down the prospect of mounting a takeover bid for Commerzbank soon, saying in March that he could wait until 2027 to determine whether it made sense.
© 2024 AFP
