UniCredit And Commerzbank Postpone Merger Talks
Italian bank UniCredit and German bank Commerzbank were preparing talks on a merger of assets, but postponed them due to Russia’s invasion to Ukraine, the Financial Times reported, citing three sources.
According to them, UniCredit chief executive Andrea Orcel planned informal talks in early 2022 about a possible merger of HypoVereinsbank (a German subsidiary of UniCredit) with Commerzbank, whose interests in the negotiations were to be represented by his colleague Manfred Knof. According to sources, Orcel organised a meeting in Germany to discuss the deal, but before he and Knof could mull over the details, Russia started the war.
The deal could have been the first major cross-border merger in Europe’s fragmented banking sector, the FT notes. The merger could have created Germany’s second largest bank with €785bn in assets, 1,000 branches and 48,000 employees. HypoVereinsbank now has a presence in Bavaria and Hamburg, while Commerzbank has a presence throughout Germany.
The executives did not have time to discuss the details of the deal, because after the start of the war UniCredit decided to focus on risk management in Russia, where the bank has a large business. Orsel said the group was considering an exit from the country and said it would cost about €7.4 billion ($8.1 billion) to completely write off its Russian business.