Commerzbank’s tie-up with Italian lender UniCredit could be “extremely difficult,” inflicting it to lose clients and hurt its credit score rating, the brand new boss of the German financial institution warned on Monday.
Italy’s second-biggest financial institution shocked markets final month by increase a stake of about 21% in its German rival, fuelling hypothesis that it might be gearing as much as launch a takeover bid.
The strategy has sparked anger in Germany, with unions fearful it may result in job losses and politicians – led by Chancellor Olaf Scholz – talking out towards a merger.
Commerzbank financial institution has vowed to combat any takeover, and Bettina Orlopp – who grew to become CEO final week – advised monetary each day the Handelsblatt that the “integration of two large banks is extremely difficult.”
In her first media interview since taking on the publish, she famous that after taking on a financial institution in 2008, Commerzbank was occupied for a number of years to merge the lenders’ programs.
“We cannot afford such a standstill in today’s world, which is characterized by so many technological upheavals and very intense competition,” she stated within the interview printed Monday.
Orlopp, who’s the German financial institution’s first feminine CEO, additionally raised considerations in regards to the affect on the creditworthiness of Commerzbank, whose ranking with company S&P is at present a number of notches above UniCredit’s.
“Our rating would deteriorate, probably significantly,” she stated.
“We would lose customers who have certain rating requirements and only do business with banks with very good credit ratings.”
Despite the opposition in Germany to a tie-up, some European policymakers – together with European Central Bank (ECB) chief Christine Lagarde – have spoken out in favor of cross-border mergers.
Creating greater European banks will assist combine eurozone monetary markets and construct up establishments that may higher compete with giant American and Chinese rivals, they argue.
But Orlopp stated {that a} tie-up between the Italian and German lenders would “not advance” capital markets or banking union within the eurozone.
“At its core, it would be a consolidation within Germany. This will not make Europe more European,” she stated.
“Instead, we would first need harmonized rules in many areas, such as insolvency or consumer law.”
Commerzbank’s shares had been up round 1.5% in Frankfurt at round 0900 GMT, whereas the entire blue-chip DAX index was down 0.3%.
UniCredit purchased 4.5% of its Commerzbank stake from the German authorities itself, which Berlin had constructed up through the world monetary disaster. Berlin nonetheless has a stake of round 12%.
Source: www.dailysabah.com