The finance minister of Germany, Christian Lindner, has announced that there are no further intentions to divest the remaining 12% stake that Berlin holds in Commerzbank, the nation’s second-largest banking institution. This follows UniCredit, an Italian banking group, purchasing a 20% stake in the bank.
The Italian bank’s investment was a response to Germany’s recent disposal of a 4.5% stake that it had accumulated during the financial crisis. This stake was subsequently bought by UniCredit at auction. The Milan-headquartered bank has later increased its investment to approximately 21%, a move which is still awaiting regulatory approval.
Christian Lindner, during a Q&A with members of the Bundestag, expressed that UniCredit’s conduct has raised eyebrows and caused a degree of distrust in Berlin and among Commerzbank employees. He also noted that the choice to offload the shareholding, in part to mend gaps in the federal budget, was a mutual decision made by the coalition parties. This was consistent with the long-standing standpoint of Berlin, which has no interest in maintaining co-ownership of a private bank over the long term.
According to Lindner, he did not directly partake in the process, which was overseen by the federal finance agency in Frankfurt and controlled from Berlin by an interministerial committee. This committee was led by Florian Toncar, the finance ministry state secretary. Post a confidential parliamentary meeting, Toncar advised UniCredit against escalating its hostile takeover, stating that it is unwise to be overly aggressive with a large, complex and highly regulated bank.
The actions of UniCredit have drawn considerable criticism in Germany, including from the Commerzbank board, its unions and Chancellor Olaf Scholz. While Lindner affirmed that Berlin does not have plans to sell its remaining stake in Commerzbank, the government has minimal say over potential buyers. He further added that if the government does decide to sell its share, it is bound to stick to a nondiscriminatory process given that Commerzbank is a public company open to all investors. The opposition parliament members criticised Lindner’s responses, describing them as a brazen attempt by the minister to evade responsibility for the sale.
Frankfurt’s politicians and those from the state of Hesse have expressed concerns that a potential takeover of Commerzbank by UniCredit could result in significant job losses and potentially diminish Frankfurt’s standing as a financial hub, drawing from past acquisition experiences. On the other hand, Andrea Orcel, UniCredit’s CEO, emphasised his eagerness to have discussions with Berlin during a conference in London.
He voiced his views categorically, stating that UniCredit’s 21% stake in Commerzbank is purely an investment and does not signify a bid or offer for the institution. Orcel positioned the Commerzbank investment as a possible measure of the capacity for European nations to unite and construct a more robust bank to compete internationally.
Earlier this month, former ECB president, Mario Draghi, cautioned that Europe may seriously worry about its self-preservation if strides are not made towards merging the European banking and capital markets.
Accusations of hypocrisy have been levelled at Berlin by Italian ministers, arguing that a German acquisition of an Italian company would not have prompted a negative perception as an anti-European move. On buying in Italy, they argue, it’s a European system, but when an Italian purchases, it’s not perceived as a single market, said Antonio Tajani, the Italian Foreign Minister.
On the contrary in Berlin, opposition parties are primarily interested in the future funding of its small- and medium-sized industries, the Mittelstand, which get about one-third of their complete financing from Commerzbank. Meanwhile, the German Association of Small and Medium-Sized Enterprises (DMB) have endorsed the UniCredit overture. Marc Tenbieg, DMB’s CEO, reasoned that without foreign backing, it would be difficult for Commerzbank to sustain itself in the international finance arena in the long run.