February 15, 2024, Hesse, Frankfurt/M.: The inscription “Commerzbank” can be seen on the Commerzbank tower in the center of the banking city. Stimulated by the interest rate turnaround, Commerzbank is aiming for a new profit increase after a record year. Photo: Helmut Fricke/dpa (Photo by Helmut Fricke/picture Alliance via Getty Images)
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Two-thirds of the jobs Commerzbank could disappear if UniCredit is successfully carrying out a hostile takeover of the German lender, a Commerzbank commissioner warned on Tuesday.
Stefan Wittmann, who is also a senior official at the German trade union Verdi, told CNBC’s Annette Weisbach that “we certainly hope that we can avoid a hostile takeover by the Italian bank.” Witmann said Commerzbank’s board has called on the German government to conduct an internal investigation into the possible takeover, hoping the bank will be given six months to take stock of the situation.
‘But if it [a hostile takeover] is inevitable, we think that two-thirds of jobs will disappear, that there will be another significant cut in the industries,” he said, according to a translation.
“In particular, we will see that UniCredit does not want all of Commerzbank’s customers at all, but focuses on the so-called best customers, namely the wealthy customers,” he added.
Berlin, which was Commerzbank’s largest shareholder after injecting 18.2 billion euros ($20.2 billion) to save the lender during the 2008 financial crisis, is likely to play a key role in any potential merger between the banks.
“We are actually concerned about our economic and industrial responsibility. As far as the workforce is concerned, which is of course the main focus of the unions, they would always bear the brunt of the merger, regardless of the time,” Wittmann said. The bank has not yet responded to a request for comment on Wittmann’s statements.
UniCredit announced on Monday that it had increased its stake in the German lender to around 21% and filed a request to increase that stake to 29.9%, signaling that a takeover bid may be in the offing. Earlier this month, the Italian bank took a 9% stake in Commerzbank, confirming that half of this stake had been acquired from the German government.
UniCredit believes substantial value can be unlocked within Commerzbank, Germany’s second-largest lender, but says further action is needed to ‘crystallize’ that value.
German Chancellor Olaf Scholz criticized UniCredit’s move on Monday, saying “unfriendly attacks and hostile takeovers are not a good thing for banks and that is why the German government has clearly positioned itself in this direction,” Reuters reported.
‘Very tense’
Commerzbank’s supervisory board will meet this week to discuss the importance of UniCredit, people familiar with the matter who wished to remain anonymous previously told CNBC.
Wittmann said the mood is currently “very tense” within the company, adding that the bank was surprised by UniCredit’s announcement on Monday, which he described as a “180-degree turnaround within 48 hours.”
“[UniCredit CEO Andrea Orcel] last spoke on Friday that he wanted a friendly takeover in consultation with all stakeholders and politicians. And yesterday we were surprised by his hostile takeover attempt. That’s not right,” Wittmann said.
The supervisory board member explained that the two main reasons to take a critical look at a possible merger are the lack of a banking union in Europe, and the fact that UniCredit has been “absorbed by Italian government bonds in recent years.”
He wondered what might happen if geopolitical tensions or “upheavals” impacted UniCredit’s availability of capital to finance Commerzbank’s industry.
In response to the 2008 financial crisis, the European Commission announced plans to create a banking union to improve the regulation and supervision of banks across the region.
Economist and former European Central Bank Governor Mario Draghi noted in a recent report that banks in Europe face regulatory hurdles that “limit their ability to lend,” also citing the “incomplete” banking union as a factor that influences the competitiveness of banks in the region.
“We have always stated, even as employee representatives in the Supervisory Board, that mergers can and should take place [a] European level, but only if the banking union is there. And that is only our second point of criticism, which we say: first create the rules of the game and the guardrails, and then do it sensibly when it is clear on which playing field we are,” says Wittmann.