Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
UniCredit boss Andrea Orcel has said the bank will not complete high-profile takeover deals for crosstown rival Banco BPM or Germany’s Commerzbank unless they represent good value for shareholders.
The lender on Monday hailed its “best quarter in history” as it reported record net profits. It made a net profit of €2.8bn in the three months to March, beating analysts’ estimates and prompting the bank to increase its full-year guidance.
UniCredit, led by industry veteran Orcel, is at the heart of a wave of attempted consolidation in the industry in Italy and Germany but has faced several setbacks, including resistance from the countries’ governments.
It launched an attempt to take over BPM in November and has built a 28 per cent holding in Commerzbank, raising the prospect of a swoop for the entire business, but both prospective deals have been hit by political pushback.
Orcel said on Monday that mergers and acquisitions offered “interesting possibilities” but that UniCredit would only pursue deals that improved the company’s “strong and resilient standalone case”.
“Why aren’t we closing [deals]? They’re not in the best interest of our shareholders,” he said.
“I’ve done M&A for a long time and I have seen massive destruction of value by management that was under media pressure to close,” he added. “I will not do that . . . so if we find the right deal, we will do it faster than you can believe. If we don’t . . . we won’t execute our own plan [to do the deals].”
Its pending takeover of BPM is in limbo after the Italian government imposed a series of conditions on any approval of the deal, including UniCredit’s full exit from Russia within nine months.
Orcel said the lender continued to work on an “orderly wind down of its Russia business” and would exit the retail market in the country by the first half of next year.
Other demands from Rome include a specific loan-to-deposit ratio and a commitment to buy Italian government bonds. UniCredit has voiced its opposition to such conditions and is due to negotiate with the government in search of a more palatable deal for BPM.
Meanwhile, the German government has voiced opposition to UniCredit’s attempted takeover of Commerzbank, in which the Milanese lender built a 29 per cent stake last year. Orcel said in March that UniCredit could now wait until 2027 before deciding whether to make a bid for Commerzbank.
UniCredit has also built a stake in insurer Generali.
Orcel said on Monday that although the macro environment had deteriorated, the bank had a “resilient” business model with “a high degree of visibility” on its earnings and shareholder distributions.
In its first-quarter results announcement on Monday, UniCredit said its net commissions were higher than expected at €2.3bn while net interest income was €3.47bn, slightly lower than anticipated by analysts.
