Unicredit ups stake in Commerzbank as it looks to ECB for next move

Previously, the ECB has indicated its support for UniCredit’s potential full takeover of Commerzbank, as the European Central Bank looks to enhance the competitiveness of the European banking system on a global scale.

UniCredit has added another 7% to its stake in Commerzbank, leaving it with a 28% share as it closes in on a controversial takeover attempt of the German bank.

The Italian bank said it a statement that its latest move was in line with a plan to increase its holding to 29.9%.

It also disclosed, as reported in the Financial Times, that the formal process for regulatory approval from the European Central Bank (ECB), to lift its direct stake from under 10% to use under 30% had been “activated”.

It had “submitted the necessary regulatory filings”, UniCredit added.

The ECB now how 60 days to take a decision on its approval, with the possibility of a 30-day extension.

ECB expected to look positively on a takeover bid

The ECB has previously indicated its support for UniCredit’s potential full takeover of Commerzbank, as it believes cross-border banking mergers align with the single market’s unity strategy of enhancing the competitiveness of the European banking system on a global scale.

President of the European Central Bank (ECB), Christine Lagarde, stated that cross-border banking mergers are desirable if such steps result in larger and more agile institutions, making European banks more competitive with their US and Chinese counterparts.

The Italian bank started building its stake in Commerzbank in September, raising speculation then about a possible takeover. It now holds a direct stake in Commerzbank of 9.5% with a further 18.5% through derivatives.