Commerzbank has unveiled a new share buyback program, with CEO Bettina Orlopp seeking to demonstrate that her strategy can deliver strong returns, as rival UniCredit moves to gain control of the bank. According to Thursday's announcement, the German lender will repurchase up to €1.2 billion ($1.4 billion) of its own shares. Net profit for the three months ending in June reached €898 million, surpassing the average analyst estimate of €856 million.
Orlopp stated in the release, "We are achieving profitable growth, investing in the future, and proving the strength of our business to customers every day." Commerzbank is facing increased pressure from UniCredit, which plans to raise its stake in the German bank to nearly 50%. UniCredit CEO Andrea Orcel has promised to implement a thorough overhaul once he gains control, but Orlopp strongly opposes some of his proposals. The two executives disagree on the extent of reforms UniCredit can enact with less than a majority stake.
Orcel previously claimed he could effectively manage the bank, while Orlopp has contested this. In her Thursday statement, Orlopp emphasized, "Even if UniCredit holds a majority at the next annual general meeting, it cannot unilaterally decide on fundamental structural measures. This clarifies the responsibilities of both parties. It requires consensus on the business model and the involvement of all stakeholders."
Reports indicate that the two CEOs will hold a video conference shortly after the earnings release, initiating discussions that could last months regarding the bank's future direction. Previous meetings between the two have only deepened their disagreements. Currently, UniCredit is awaiting regulatory approval to formally receive the Commerzbank shares that investors tendered under its acquisition offer concluded in July. According to sources, this process recently passed a key hurdle, with German financial regulator BaFin confirming that UniCredit's application to increase its stake in Commerzbank above 30% is complete and valid. This triggers a review by the European Central Bank, which could take up to 60 working days.
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