Potential Job Losses Loom with UniCredit Takeover, Warns Commerzbank Board Member
15 February 2024, Hesse, Frankfurt/M.: The Commerzbank Tower proudly displays the iconic “Commerzbank” lettering in the heart of the banking city. With a resurgence in interest rates, Commerzbank is setting its sights on another profitable year following a record-breaking performance. Photo: Helmut Fricke/dpa (Photo by Helmut Fricke/picture alliance via Getty Images)
Two-thirds of the jobs at Commerzbank could be at risk if UniCredit successfully executes a hostile takeover of the German lender, a Commerzbank supervisory board member cautioned on Tuesday. Stefan Wittmann, a senior official at German trade union Verdi, expressed concerns to CNBC’s Annette Weisbach about the potential ramifications of a takeover by the Italian bank. Wittmann stressed the importance of avoiding a hostile takeover and highlighted the need for the German government to conduct an internal review to assess the situation thoroughly.
Implications of a Potential Takeover
Wittmann underscored that if a hostile takeover by UniCredit were to occur, it could lead to a significant reduction in jobs at Commerzbank, with two-thirds of the workforce facing potential layoffs. He also mentioned the possibility of branch closures and emphasized UniCredit’s focus on retaining high-net-worth clients rather than catering to all of Commerzbank’s customer base. The impact of such a takeover extends beyond just the workforce, as it raises concerns about the future direction and strategy of the merged entity.
UniCredit’s Strategic Moves
UniCredit’s recent announcement of increasing its stake in Commerzbank to around 21% and seeking approval to raise it further to 29.9% signals its intentions for a potential takeover bid. The Italian bank believes that there is untapped value within Commerzbank, Germany’s second-largest lender, but acknowledges the need for decisive actions to unlock this value. However, German Chancellor Olaf Scholz criticized UniCredit’s aggressive approach, emphasizing the negative consequences of unfriendly takeovers in the banking sector.
Challenges and Concerns
Commerzbank’s supervisory board is set to convene to discuss UniCredit’s increased stake, reflecting the heightened tension within the organization. Wittmann expressed surprise at UniCredit’s abrupt shift from discussing a friendly takeover to pursuing a hostile bid, raising questions about the Italian bank’s motives and long-term strategy. He also highlighted concerns about the lack of a banking union in Europe and UniCredit’s exposure to Italian government bonds, which could pose risks in the event of geopolitical uncertainties or financial disruptions.
The Need for Regulatory Clarity
Wittmann emphasized the importance of establishing clear regulatory frameworks and safeguards before embarking on major mergers in the banking sector. He called for the implementation of a robust banking union in Europe to ensure stability and transparency in cross-border transactions. The incomplete nature of the current banking union presents challenges for banks operating in the region, impacting their competitiveness and ability to navigate complex financial landscapes.
Looking Ahead
As the situation between Commerzbank and UniCredit unfolds, stakeholders, including employees, investors, and regulatory bodies, will closely monitor developments to assess the potential impact on jobs, market dynamics, and financial stability. The outcome of this potential takeover bid will not only shape the future of these two banking giants but also influence the broader landscape of the European banking sector. The need for strategic planning, regulatory alignment, and stakeholder engagement remains paramount in navigating the complexities of such mergers and acquisitions.