Following the Italian bank’s unexpected acquisition of a sizable portion of the German lender, Commerzbank’s supervisory board chairman, Jens Weidmann, stated that there is minimal possibility of a friendly merger with UniCredit, according to the Handelsblatt Daily.
Jens Weidmann stated in a recently released interview with Handelsblatt, “It’s like any relationship: if the start is unsuccessful, it will be difficult.”
Additionally, he questioned whether a hostile takeover of the banking industry could produce long-term value.
“In mergers, it’s critical that management initially communicate with one another in a trustworthy manner and establish a shared understanding. UniCredit chose not to do this and shocked us by coming in. It’s not stylish,” Jens Weidmann remarked.
UniCredit now owns approximately 28% of Commerzbank’s shares. The Italian institution directly owns about 9.5%, and UniCredit has access to an additional 18.5% through financial instruments.
Deutsche Bank and Commerzbank are two sizable, independent private banks that Jens Weidmann believes would be beneficial to Germany’s financial sovereignty.
According to him, a look at HypoVereinsbank and Bank Austria, which UniCredit acquired in 2005, demonstrates how banks can change after losing their autonomy.
Jens Weidmann stated that many customers, particularly those in the small and medium-sized business sector, would have to reorient themselves in response to such a move.
“Commerzbank’s footprint in Germany would probably be smaller, and the attractiveness of Frankfurt as a financial centre would suffer,” he advised.
Meanwhile, UniCredit has announced plans to bring its back-office activities for securities services across Italy and Germany in-house, standardising its set-up and suppliers in a move that is set to create over 200 new jobs.
The internalisation will involve building out a back-office platform for the bank’s custody services business, initially focused on Germany, while staffing teams to manage these operations in-house, creating more than 140 new jobs in Germany in the process, where the service was previously mostly outsourced. There will also be a further 60 roles created in Italy, drawing on both the market and the bank’s reskilling programme agreed with the trade unions.
The move comes as part of a group-wide optimisation of the bank’s securities set-up, aiming to create a standardised approach across the European countries, underpinned by common partners and a modern platform. This will, in turn, provide a more secure, flexible and cost-efficient foundation for the delivery of the bank’s custody services, bringing the teams closer to their clients and enabling them to be more agile and impactful in their execution.
The bank is in close contact with the relevant Works Councils to define the necessary next steps together.
Commenting on the initiative, Richard Burton, UniCredit’s Head of Client Solutions, said, “We continue to focus on the simplification of our business – internalising value chains and leveraging our scale so we can become more impactful on behalf of our clients. This latest move in custody services is a step in the same direction – giving us a stronger, more flexible foundation to meet our clients’ changing needs.”
Marion Hollinger, CEO, HypoVereinsbank Germany, said, “We are constantly developing our processes and checking whether it makes sense to build up external expertise internally. We see great potential in our in-house custody services to strengthen our German business and at the same time maximise synergies throughout the Group.”