Commerzbank announces €1.2 billion buyback as quarterly profit tops expectations
Commerzbank announced a new share-buyback program as UniCredit prepares to seek control of the German bank, with Chief Executive Bettina Orlopp seeking to demonstrate that her strategy can deliver strong returns. According to an announcement Thursday, Commerzbank will repurchase up to €1.2 billion ($1.4 billion) of its own shares. Net income for the three months ended in June was €898 million, exceeding analysts’ average estimate of €856 million. “We are delivering profitable growth, investing in the future and proving the strength of our business to customers every day,” Orlopp said in a statement. Commerzbank is facing further moves by UniCredit, which plans to increase its stake in the German bank to nearly 50%. UniCredit CEO Andrea Orcel has pledged a thorough overhaul if he gains control, but Orlopp has strongly opposed some of his proposals. The two CEOs disagree over how extensively UniCredit could reshape Commerzbank with a stake of less than half. Orcel previously said he could control the bank, while Orlopp disputed that view. “Even if UniCredit holds a majority of the seats at the next annual general meeting, it cannot unilaterally decide on fundamental structural measures,” Orlopp said in Thursday’s statement. “This clarifies the responsibilities of both sides. It requires agreement on the business model and the participation of all stakeholders.” The two CEOs are reportedly set to hold a video meeting shortly after the earnings release, beginning discussions about the bank’s future that could last for months. Their previous meetings ultimately deepened their differences. UniCredit is awaiting regulatory approval to formally take receipt of the Commerzbank shares tendered by investors in its takeover offer, which ended in July. People familiar with the matter said the process recently cleared a key hurdle: Germany’s financial regulator, BaFin, confirmed that UniCredit’s application to raise its stake in Commerzbank above 30% was complete and valid. That triggered a European Central Bank review that could last as long as 60 business days.
According to an announcement Thursday, Commerzbank will repurchase up to €1.2 billion ($1.4 billion) of its own shares. Net income for the three months ended in June was €898 million, exceeding analysts’ average estimate of €856 million.
“We are delivering profitable growth, investing in the future and proving the strength of our business to customers every day,” Orlopp said in a statement.
Commerzbank is facing further moves by UniCredit, which plans to increase its stake in the German bank to nearly 50%. UniCredit CEO Andrea Orcel has pledged a thorough overhaul if he gains control, but Orlopp has strongly opposed some of his proposals.
The two CEOs disagree over how extensively UniCredit could reshape Commerzbank with a stake of less than half. Orcel previously said he could control the bank, while Orlopp disputed that view.
“Even if UniCredit holds a majority of the seats at the next annual general meeting, it cannot unilaterally decide on fundamental structural measures,” Orlopp said in Thursday’s statement. “This clarifies the responsibilities of both sides. It requires agreement on the business model and the participation of all stakeholders.”
The two CEOs are reportedly set to hold a video meeting shortly after the earnings release, beginning discussions about the bank’s future that could last for months. Their previous meetings ultimately deepened their differences.
UniCredit is awaiting regulatory approval to formally take receipt of the Commerzbank shares tendered by investors in its takeover offer, which ended in July. People familiar with the matter said the process recently cleared a key hurdle: Germany’s financial regulator, BaFin, confirmed that UniCredit’s application to raise its stake in Commerzbank above 30% was complete and valid. That triggered a European Central Bank review that could last as long as 60 business days.