Commerzbank (CBKG.DE) announced Wednesday it will commence a share buyback program of up to €1 billion ($1.18 billion), beginning Thursday. This action occurs as the German lender aims to maintain its independence in the face of increasing pressure from Italy’s UniCredit (CRDI.MI), which has been advocating for a merger. Commerzbank had previously announced its buyback intentions in August, but is now detailing the plan following regulatory approval.
The share buyback aims to reassure shareholders of the bank’s standalone strategy as UniCredit steadily increases its stake in Commerzbank and pushes for combination talks. According to CEO Bettina Orlopp, returning capital to shareholders is a key component of the bank’s value creation strategy. Commerzbank is a German bank that provides banking and financial services to private and corporate customers. It operates through two segments: Private and Small-Business Customers, and Corporate Clients.
The announcement followed the conclusion of an annual strategy session involving Commerzbank’s management and supervisory boards. This buyback, the bank’s fifth since 2023, is scheduled to conclude by February 10. UniCredit currently holds a 26% equity stake in Commerzbank and intends to raise its holding to just under 30% in the coming months.
UniCredit’s CEO, Andrea Orcel, has been vocal about the potential benefits of a merger since initiating the stake buildup a year ago. Last week, Orcel expressed his hope that Commerzbank would eventually “see the light over time” regarding a merger.
