Unicredit Aims to Remove Commerzbank Executives in Takeover Bid

In the event of a Commerzbank takeover, the Italian bank Unicredit intends to make significant personnel changes. Unicredit CEO Andrea Orcel described the existing bureaucracy as "out of control."

Unicredit CEO Andrea Orcel plans substantial cuts to management and a reduction in bureaucracy should a takeover of Commerzbank be successful. Orcel stated on Monday that approximately 60 percent of the targeted savings would come from non-personnel areas and non-core international activities, meaning not from Germany. The remaining 40 percent he aims to achieve primarily by eliminating management positions and cutting what he termed "out of control" bureaucracy. Orcel believes further restructuring at Commerzbank would be inevitable even if the current situation persisted.

Shortly before these remarks, Unicredit had criticized Commerzbank's business model and strategy in a presentation titled "Commerzbank. A New Chapter." Unicredit wrote that the bank was lagging behind competitors operationally and was "overvalued" based on its fundamental data. Commerzbank's stock has significantly recovered in recent years and is now trading at a level similar to before the financial crisis.

Just a Tactical Maneuver?

According to experts, Orcel's criticism may also be a tactical maneuver. Philipp Häßler, a banking analyst at DZ Bank, noted, "By publishing detailed figures, Unicredit is increasing pressure on Commerzbank's management." However, he also questioned whether the Italian bank's plans would gain approval. A significant increase in the takeover offer, which would be necessary for broad shareholder acceptance, is not yet apparent. Furthermore, planned personnel cuts are likely to face political opposition and internal resistance within the bank.

An analyst from a major banking house, who wished to remain anonymous, partially agrees with Unicredit CEO Orcel. While Commerzbank's operational performance has indeed improved significantly, the analyst suggests that some of these better results are due to the interest rate environment, which allows banks to earn more on loans currently. It remains uncertain whether Commerzbank has truly strengthened its business sustainably, particularly in its corporate client segment, which it has recently expanded significantly. "We have record levels of insolvencies," the analyst stated, warning that increasing difficulties for small and medium-sized enterprises could lead to problems within the bank's loan portfolio.

The analyst believes there is a general need for catching up in terms of restructuring and cost savings. Many banks could operate more efficiently, for instance, by adopting new technologies like artificial intelligence. "There is enormous optimization potential in the financial sector," they said. However, this is difficult to implement because many banks are burdened with old IT systems that have evolved over years. These structures have effectively "built up" and can only be modernized slowly.

Commerzbank Takeover: Showdown on May 4th

Unicredit CEO Orcel has been advocating for a Commerzbank takeover since his institution first acquired a stake in September 2024. He argues that Europe needs larger banks to compete effectively with strong US financial institutions.

Unicredit is already Commerzbank's largest shareholder, directly holding 26 percent of the Frankfurt-based bank. In total, the Italian bank claims to have access to just under 30 percent of Commerzbank shares. In mid-March, Unicredit announced a voluntary exchange offer for all shares. At an extraordinary general meeting on May 4th, Unicredit intends to secure shareholder approval for the necessary capital increase.

Commerzbank declined to comment on Monday. However, the bank itself sees no added value in a merger of the two large institutions and rejects Orcel's perceived hostile approach. The SPD-led Federal Ministry of Finance also clearly opposes the takeover. A ministry spokesperson stated on Monday, "The federal government supports Commerzbank's strategy of independence." The German government is the second-largest single shareholder, holding 12.1 percent of the credit institution.