They amounted to EUR 13.8 billion, while Deutsche Bank can boast of the amount of USD 13.4 billion – reports Bloomberg.
What does the acquisition of Commerzbank give UniCredit?
If the transaction goes through, the Milan-based bank’s balance sheet will increase by as much as EUR 560 billion, or an astronomical 70 percent.
Commerzbank is a valuable acquisition, because it would open the door for UniCredit to small and medium-sized German companies, which are the backbone of the economy of our western neighbor. The Italian tycoon would also increase its presence on the markets of Eastern and Central Europe thanks to such a transaction – we read on the Bloomberg portal.
According to Mediobanca analyst Andrea Filtri Commerzbank is a perfect fit for Unicredit, because it has an extremely strong position not only in Germany but also in Poland.
UniCredit wants to be a pan-European bank
CEO’s ambition UniCredit Andrea Orcel’s goal is to make the bank a pan-European entity. This is a very difficult task, considering how fragmented the European lending market has been for a long time. It is worth noting, however, that UniCredit already operates in 13 different countries.
How did the bank’s revenues break down in 2023? Italy had the largest share (EUR 10.9 billion in revenues), but Germany is also a very large market for the bank (EUR 5.4 billion). Central Europe (EUR 4.3 billion), Eastern Europe (EUR 2.6 billion) and Russia (EUR 1.2 billion in revenues in 2023) also make up a significant part of the financial pie.
UniCredit’s Geographic Strategy
According to Orcel, the best mergers and acquisitions for his bank are those that strengthen the entity’s position in markets where it was already present. He looks favorably on market consolidation in Italy, Germany and Austria, and expansion in Central and Eastern Europe.
UniCredit takes over the German HVB Group in 2005 for around 19 billion euros. The brand was rebranded to UniCredit Bank AG. UniCredit’s German operations were restructured: part of the operations were moved to Italy, and there were cost and employment cuts. The bank also went down the path of reducing debt.
UniCredit’s expansion plans in Poland
Acquisition of Commerzbank by UniCredit control over the Polish mBank. Poland is a key country in the region for the bank’s superpower plans. The Italian lender left Poland in 2017 along with sale of shares in Pekao SA. Orcel had already returned from UniCredit to Poland, taking over the Vodeno and Aion banks. The bank’s CEO stressed that the bank had left Poland reluctantly.
UniCredit’s biggest problem right now is Russia, where, as I wrote earlier, a significant portion of the bank’s revenue comes from. Commerzbank also has significant operations in that country. A Russian court decided in May to freeze the assets of UniCredit, Commerzbank and Deutsche Bank, which are located in the world’s largest country by area.
