(April 15): Commerzbank AG chief financial officer Carsten Schmitt said a takeover of the German lender by Italian rival UniCredit SpA could impede its ability to support the economy and wouldn’t create value for investors at this time.
“With the heavy burden of an integration, of bringing banks together in such a vulnerable situation in the economy, we simply feel that we would not be able to actually stand at the side of our customers,” Schmitt said at a banking conference in Frankfurt. That’s “besides the fact that we don’t see the value being created over the next years".
UniCredit announced a takeover bid for the German lender last month and the two lenders have held talks. Commerzbank chief executive Bettina Orlopp said earlier this week that for the time being, “opinions differ quite a lot, starting with the valuation of the two companies and the exchange ratio".
Commerzbank can also count on the backing from the German government, which has reiterated its opposition to a takeover.
Separately, Schmitt said that Commerzbank has introduced daily risk meetings to assess the impact of the Iran war. So far, the direct impact has been limited.
“Contrary to previous crises, credit risk and credit spreads are actually not rising that much,” Schmitt said. “There’s more trust in the market to actually deal with this.”
See also: CRE, Middle East, gold and directors' fees among questions at UOB’s AGM
Clients’ demand for currency and commodity hedging has spiked, and some have started to bring procurement forward, including of computer components, he said.
In the longer term, Commerzbank expects additional capital burdens to be imposed by regulators “because many of the base case scenarios have gone completely out of the window and the adverse scenarios are the ones that are now a base case scenario".
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