Commerzbank has warned the German government of the possible risks arising from a multibillion-euro merger with Italy’s UniCredit because it would come at the cost of interests for the companies that keep the German economy running. According to a report published in the Financial Times on Monday,.
Early this month, UniCredit purchased a 9 percent stake in Commerzbank, catching German regulators off guard and causing much consternation. The interest of the Italian bank is nothing if not a bold attempt at a pan-European banking merger, but substantial political resistance to it has emerged in Germany.
Fears that such a merger might hurt lending to SMEs-a mainstay of the German economy-have been raised by executives at Commerzbank. People close to internal debates said that under such a merged entity, decisions on credit disbursement and risk management may be concentrated abroad at the expense of service for longstanding domestic customers.
Commerzbank officials said an “Italy first” policy at UniCredit in times of financial strain could put German clients at a disadvantage and dent the broader economy. For its part, UniCredit countered that such claims distort its operations, citing how the bank operates as a “pan-European” entity with completely separate legal entities in each market.
The German government has so far declined to comment on the matter, while UniCredit and Commerzbank have yet to respond to queries about the situation.
