Commerzbank Rides Out UniCredit Bid to Claim Profit Surge

Germany's Commerzbank delivered stronger-than-predicted outcomes for the initial quarter of 2025. Contrary to expectations of a drop in net income, the financial institution saw its net profit rise by 12%, totaling €834 million.

The lender's revenue rose by 12% to reach €3.1 billion, whereas net interest income was marginally lower compared to the previous year, amounting to €2.07 billion as of the end of Q1 2025. Additionally, net commission income, bolstered by robust performance in the securities sector, climbed by 6% to hit €1 billion during this timeframe.

We have reached the peak quarterly profits since 2011, which shows that we can expand despite tough economic conditions," stated Commerzbank CEO Bettina Orlopp. "Our progress aligns well with executing 'Momentum,' our strategic vision. In the upcoming years, we intend to distribute additional funds back to our shareholders.

Commerzbank concluded a share repurchase program totaling €1 billion beginning in November 2024. Additionally, they plan to distribute a dividend of €0.65 per share, with this decision scheduled for approval at their Annual General Meeting on May 15, 2025.

The superior-than-predicted outcomes are emerging as the German bank strives to ward off the acquisition attempts from Italy's leading banking institution, UniCredit.

Related

• Commerzbank plans to reduce staff and increase profitability in an effort to ward off competition from UniCredit.
• Italy's UniCredit exceeds profit forecast while pursuing acquisition push

Recently, UniCredit increased its holding in Commerzbank significantly, boosting its stake up to 29.9%. This figure is notably below the 30% mark where UniCredit would be obligated to launch a formal bid for the whole company.

In February, Commerzbank unveiled cost-reduction strategies, involving layoffs amounting to roughly 10 percent of their total staff, aiming to prevent any potential hostile acquisition from the Italian banking firm.

The representative body for employees at the German bank is planning a demonstration against a potential acquisition, set to take place shortly before Commerzbank’s yearly shareholder gathering on May 15th.

Commerzbank verified its goals for the year.

The German banking institution stated that they anticipate a higher net outcome of approximately €2.4 billion for the entire year, following restructuring costs.

In the first quarter, the bank allocated €40 million for restructuring costs related to an early partial retirement initiative scheduled for later this year. This measure forms part of workforce reduction efforts, as discussions are underway between the financial institution and employee representation bodies.

Moreover, to maintain profitability, Commerzbank decreases its reliance on net interest income—the gap between earnings from loans and payments for deposits—as interest rates decline.

The return on tangible equity rose to 11.1% in the initial three months, up from 10.5% during the corresponding period last year—a typically robust seasonal performance. "Our progress indicates we're well-positioned to achieve our annual objective of approximately 9.6%," noted Commerzbank Chief Financial Officer Carsten Schmitt. "Moreover, we continue to lessen reliance on net interest income. Our forecast for 2025 remains unchanged."