MILAN (Reuters) -UniCredit said on Monday it had increased its voting rights in Commerzbank to about 26% by converting more of its synthetic position into physical shares, bolstering the Italian bank’s position as Commerzbank’s biggest shareholder.
UniCredit added that its remaining synthetic position should be converted into physical shares in due course, taking its total equity voting stake in the German bank to about 29%.
UniCredit, Italy’s second-largest bank, became the biggest private investor in the German bank a year ago, meeting stark opposition from Germany to full takeover plans. In July, it reached a 20% equity stake by converting derivatives representing about 10% of the lender.
UniCredit’s increased stake “does not change the fundamental situation and our stance,” Commerzbank said in a statement, reiterating its commitment to growth and creating value for all its stakeholders.
UniCredit, which secured European Central Bank clearance earlier this year for a 29.9% holding, said on Monday it did not intend to seek board representation “at this time”.
It said its investment “has exceeded our financial metrics thereby creating significant value for UniCredit shareholders”, adding that the overall cost of the investment had increased.
The bank said the total CET1 ratio impact for the 29% equity voting stake rose to about 145 bps from the 110 bps previously announced due to a higher share price and contextual restructuring of the collar derivative hedging to reduce future P&L volatility.
“The return on investment is confirmed at around 20%”, the bank said.
(Reporting by Claudia Cristoferi; Editing by Philippe Leroy Beaulieu, Bernadette Baum and Helen Popper)
