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FINANCIALS: Fitch Bulletin On UniCredit’s Commerzbank Stake

FINANCIALS
BulletCredit Bullets
  • UniCredit’s acquisition of a 21% stake in Commerzbank won’t affect rating, but a full takeover would improve the profile if risks are managed.
  • The 21% stake would reduce the CET1 ratio by <150bps while a 29.9% stake would reduce it by <200bp, with the bank expected to maintain a CET1 ratio above 16% by year-end.
  • A full takeover would shift UniCredit’s exposure towards Germany (30%-35% of revenue), reducing reliance on Italy, strengthening its business profile and improving asset quality.
  • UniCredit could capture significant cost synergies by aligning Commerzbank’s 60% cost/income ratio with the 40% reached at UniCredit.
  • UniCredit’s strong capital position (EUR 6.5bn excess above CET1 target) allows for flexibility in financing, but integration challenges would mean that Unicredit falls short of the forecasted 3.5-4% Op Profit to RWA in 2024-2026.
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  • UniCredit’s acquisition of a 21% stake in Commerzbank won’t affect rating, but a full takeover would improve the profile if risks are managed.
  • The 21% stake would reduce the CET1 ratio by <150bps while a 29.9% stake would reduce it by <200bp, with the bank expected to maintain a CET1 ratio above 16% by year-end.
  • A full takeover would shift UniCredit’s exposure towards Germany (30%-35% of revenue), reducing reliance on Italy, strengthening its business profile and improving asset quality.
  • UniCredit could capture significant cost synergies by aligning Commerzbank’s 60% cost/income ratio with the 40% reached at UniCredit.
  • UniCredit’s strong capital position (EUR 6.5bn excess above CET1 target) allows for flexibility in financing, but integration challenges would mean that Unicredit falls short of the forecasted 3.5-4% Op Profit to RWA in 2024-2026.