FRANKFURT/BERLIN, Sept 12 (Askume) – UniCredit ‘s (CRDI.MI) preliminary move to take over Commerzbank has revived debate over the future of German banking, prompting Berlin to delay the sale of its stake in the lender and focus on Deutsche’s sidelines.
Italy’s second-largest bank decided to take a 9% stake in Commerzbank earlier this week , surprising German officials and triggering a sharp reaction from local management who wanted the decision blocked .
UniCredit Chief Executive Andrea Oeser said on Thursday he was interested in a merger but was in no hurry and that his stake in the German bank was a good investment.
His straightforward approach of first buying market share and then purchasing shares sold by the German government through an overnight sell-off had angered some executives in Berlin and at Commerzbank and made him unpopular at his headquarters in Frankfurt, sources told Askume.
Commerzbank, seen as key to saving the country after the 2008 financial crisis, is one of Germany’s few large private banks and a major lender to the country’s so-called medium-sized companies.
The German government said earlier this month that it wanted to reduce its stake in the bank .
Hans-Peter Berghof, a banking expert at Germany’s University of Hohenheim, said the partnership with UniCredit would “reduce competition in Germany, which would be detrimental for Germany, especially in the sector of medium-sized companies.”
The Treasury Department declined to comment, and commercial banks declined to comment on Oser’s remarks.
As events unfold, investors’ attention has turned to another potential marriage: an acquisition by Deutsche Bank AG (DBKGn.DE) .
JPMorgan analysts said in a note to clients that the merger was “in the best interests of Deutsche Bank and Germany.”
“In a world of geopolitical and trade tensions, listing a large German bank nationally and keeping a Hausbank (local bank) could be an attractive option for German businesses,” he said.
JPMorgan analysts said it would also help Deutsche Bank reduce its reliance on its more volatile investment banking business, which has been a concern for its investors.
Deutsche Bank declined to comment, citing a statement this week that said it was focusing on its growth strategy.
But in Germany, there are doubts about the viability of the Deutsche Bank/Commerzbank consortium.
Deutsche Bank explored the possibility of acquiring Commerzbank five years ago at the request of the German government but later ruled out the possibility, people familiar with the matter told Askume at the time.
A German official told Askume at the time that a major hurdle was that it would result in billions of euros in financial losses because any merger could lead to valuation adjustments for some investments, such as Italian government bonds held by Commerzbank. The combination could lead to losses.
Potential job losses and impact on customers is also a major concern.
Stefan Szukalski, union chairman and non-executive director on Deutsche Bank’s supervisory board, said he would be very surprised if Deutsche Bank entered into talks with Commerzbank.
Szukalski, speaking as union president, said he expected such a merger would drive away business customers who want to choose between banks.
“It won’t help,” he said. “Of course we would object. 100 percent… It’s absolutely the wrong move. Banks should complement each other when it comes to acquisitions.”
Meanwhile, Oser said UniCredit would seek permission from the European Central Bank, the bank’s main regulator, to increase its stake.
“Many officials are hoping for cross-border integration and it will be very interesting to watch this process in the coming weeks,” ECB President Christine Lagarde told reporters on Thursday.
