Commerzbank’s new plan to remain independent
Bettina Orlopp works according to plan to maintain the assumed growth risk-weighted assets (RWA) at the level of several billion euros below the current target for 2027 – report people close to the matter who wish to remain anonymous. Boss lady Commerzbank it wants to achieve this in part by using more significant risk transfers and potentially withdrawing from some low-income clients, sources tell Bloomberg.
This move, which has not been previously announced, would reduce the additional amount of regulatory capital associated with the previously anticipated increase in RWA assets. This, in turn, would increase space and capital for shareholder payouts or investments, including acquisitions, explain people close to the matter.
Commerzbank refused to officially comment on this matter.
The level of risk-weighted assets, or RWAdetermines how much core capital a given lender must retain as a regulatory cushion. Commerzbank in September reduced the expected increase in RWA by EUR 7 billion until 2027 compared to the guidelines given a year ago. The new plan currently being considered by Bettina Orlopp aims to further limit the growth of RWA.
UniCredit does not believe in Commerzbank’s strategy
The capital release strategy is central to Bettina Orlopp’s plan to convince shareholders that Commerzbank is a worthwhile investment in its own right.
The head of Commerbank shortly after Italian UniCredit entered the game in September by taking over shares in Commerzbank and announcing that it was considering a complete takeover of the institution, increased its goals for profitability and shareholder payouts.
In turn, Andrea Orcel, executive director of the Italian Commerzbank, has already signaled that he does not believe in the existing strategy Commerzbank and considers it unambitious. Bettina Orlopp, during a meeting with the director of Commerzbank, presented him with a plan for the German institution and spoke in favor of its independence.
