Unicredit & Commerzbank
Note: This is a daily stock update and the information stands true as of 11/09/24, 09:00 CEST.
Company Update:
Unicredit took a 4.5% stake in Commerzbank during yesterday's placing and is said to now own 9% of the company, which if confirmed would make it the largest shareholder after the German Government (now 12%, but wishing to exit). We have a buy rating on Commerzbank and an add rating on Unicredit. Note that Unicredit already has a position in Germany through its HypoVereinsBank subsidiary (100% owned with retail banking, capital markets and wealth management).
We believe a deal between Unicredit and Commerzbank would make a lot of sense and a takeover bid in shares is likely.
Expert Opinion:
Obviously a great news for Commerzbank shareholders with speculation likely to boost shares over the short term.
NOTE:
In the report released yesterday (11-09-2024), Mario Draghi, among other things called for a true unification of the European markets, and notably financial markets. Indeed, from a European perspective, banks are too small and often only present in their home country. This is why a consolidation of the sector would make sense and many have called for transborder mergers in the sector. A full Unicredit-Commerzbank merger could be a step in that direction.
If that should materialize (or start being priced by the market), a bank I would buy is Société Generale. For one, it is the cheapest bank in our sector on the back of our PE25 (4x) and the third cheapest on PE24 (5.7x). Second, the current strategy led by M Krupa (selling the non-core assets and reinvesting in the business where Société Generale has an edge) is smart and more importantly makes it the ideal target for a bank willing to take a position in France and gets a strong investment bank (at least in markets). Lastly, the group will reap the benefit in France of the merger between Sociéte Generale retail and Credit du Nord, hence improving the profitability of the group.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
Company Update:
Unicredit took a 4.5% stake in Commerzbank during yesterday's placing and is said to now own 9% of the company, which if confirmed would make it the largest shareholder after the German Government (now 12%, but wishing to exit). We have a buy rating on Commerzbank and an add rating on Unicredit. Note that Unicredit already has a position in Germany through its HypoVereinsBank subsidiary (100% owned with retail banking, capital markets and wealth management).
We believe a deal between Unicredit and Commerzbank would make a lot of sense and a takeover bid in shares is likely.
Expert Opinion:
Obviously a great news for Commerzbank shareholders with speculation likely to boost shares over the short term.
NOTE:
In the report released yesterday (11-09-2024), Mario Draghi, among other things called for a true unification of the European markets, and notably financial markets. Indeed, from a European perspective, banks are too small and often only present in their home country. This is why a consolidation of the sector would make sense and many have called for transborder mergers in the sector. A full Unicredit-Commerzbank merger could be a step in that direction.
If that should materialize (or start being priced by the market), a bank I would buy is Société Generale. For one, it is the cheapest bank in our sector on the back of our PE25 (4x) and the third cheapest on PE24 (5.7x). Second, the current strategy led by M Krupa (selling the non-core assets and reinvesting in the business where Société Generale has an edge) is smart and more importantly makes it the ideal target for a bank willing to take a position in France and gets a strong investment bank (at least in markets). Lastly, the group will reap the benefit in France of the merger between Sociéte Generale retail and Credit du Nord, hence improving the profitability of the group.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
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